Bitcoin's Bearish Trend: A Tale of Supply and Demand
In a recent insightful post, Julio Moreno, the research head at CryptoQuant, has shed light on an intriguing aspect of the Bitcoin market. Moreno's analysis takes a unique approach, focusing on the demand side of the equation, a perspective often overlooked.
The Long-Term Holder Enigma
Long-term holders, those who have held onto their Bitcoin for over 155 days, are considered the market's staunchest supporters. Their distribution patterns are closely watched by on-chain analysts. However, Moreno's interest lies elsewhere.
Demand vs. Supply: The Real Story
Instead of solely observing long-term holder activity, Moreno assesses whether there's sufficient demand to match the supply being sold by these holders at higher prices. This is where the Apparent Demand indicator comes into play. It compares Bitcoin's daily production (issued by miners) with changes in its long-term inventory (supply inactive for over a year).
The Apparent Demand Metric: A Visual Story
Moreno shared a revealing chart, showcasing the 30-day and 1-year Apparent Demand trends for Bitcoin over the past few years. The graph paints a clear picture:
- 30-Day Apparent Demand: Red in recent weeks, indicating a negative short-term demand for Bitcoin. Moreno asks, "Is there enough demand to absorb the supply at higher prices?" The answer, unfortunately, has been "no" for the past few weeks, leading to the decline in Bitcoin's price.
- 1-Year Apparent Demand: While it has grown recently, the pace is slow, and its value remains below the 90-day simple moving average (SMA).
The Bearish Trend: A Repeat?
The last time Bitcoin experienced an extended phase of negative 30-day Apparent Demand was during the bearish phase earlier this year. The question now is, will history repeat itself, or will demand rebound?
BTC Price Snapshot
At the time of writing, Bitcoin is trading around $103,900, a 9% decline over the last seven days.
And here's the controversial part: Is this a temporary dip, or a sign of a more prolonged bearish trend? What do you think? Feel free to share your thoughts and predictions in the comments!
